Foreigners may face curbs in second-hand property market

(China Daily)
Updated: 2006-10-13 08:43
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The central government's restrictions on foreigners buying property in China, issued in July, left some leeway in the second-hand market for possible overseas purchasers, stirring up expectations of further regulations.

And the Beijing News yesterday claimed that new regulations on foreigners and overseas Chinese buying used property in Beijing are expected to be promulgated within a month, with a real-name house purchasing system adopted.

Sources from the Beijing Construction Committee, the capital's policy-making and administrative body for the real estate sector, declined to comment on the issue.

But real estate agencies, insiders and experts believe a policy on second-hand housing will be drawn up shortly, because July's policy shift has already pointed potential overseas house buyers towards the second-hand market.

"Foreigners' enthusiasm for property (in Chinese cities) is mainly stimulated by the huge appreciation potential and the high-end second-hand market is regarded as another way for them to generate profit in the future," said Luo Yu, marketing manager of Xinyitian Real Estate Agent Co Ltd, a Beijing-based national real estate agent.

He acknowledged that extending the restrictions to the used housing sector would help cool down the real estate market in general.

Some others, however, pointed out that it was difficult for the government to formulate a set of practical rules to restrict the second-hand housing market.

"Cash transactions are very common in the (second-hand) market, thus it will be impossible for an administrator to supervise," said Jiang Yadong, a researcher at the Beijing Real Estate Industrial Association.

Meanwhile, there is no overall registration system for the used property market, meaning there is no complete record of buyers and sellers that can be provided for the administrators.

Jiang said he believed the first step in formulating or even implementing restrictions on the second-hand market is market standardization.

In addition, local governments should keep in line with the national standard and take efforts to administrate and supervise market players.

"I believe related regulations will be issued sooner or later to guarantee the efficiency of macro control policies for the over-heated real estate market," said Jiang, adding that the sooner the regulations came into force, the better.

(China Daily 10/13/2006 page9)